Pressure on Spanish PM to explain Swiss bank money

FILE - In this Jan. 18, 2013 file photo, people shout slogans as they protest against corruption outside the Popular Party's headquarters in central Madrid. In an announcement Monday Jan. 21, 2013, Spain's governing Popular Party says it will commission an external audit of its finances to clear its name several days after Spain's National Court said that an investigation it began in 2009 about allegations of irregular party financing found that former party Treasurer Luis Barcenas had amassed an unexplained euro 22 million ($29 million) in a Swiss bank account. Spanish newspapers have alleged that he regularly distributed under-the-table bonuses to party leaders. Banner reads 'Resign Rajoy thief'. (AP Photo/Andres Kudacki File)
— AP

FILE - In this Jan. 18, 2013 file photo, people shout slogans as they protest against corruption outside the Popular Party's headquarters in central Madrid. In an announcement Monday Jan. 21, 2013, Spain's governing Popular Party says it will commission an external audit of its finances to clear its name several days after Spain's National Court said that an investigation it began in 2009 about allegations of irregular party financing found that former party Treasurer Luis Barcenas had amassed an unexplained euro 22 million ($29 million) in a Swiss bank account. Spanish newspapers have alleged that he regularly distributed under-the-table bonuses to party leaders. Banner reads 'Resign Rajoy thief'. (AP Photo/Andres Kudacki File)
/ AP

MADRID 
Pressure piled up Tuesday on Spanish conservative Prime Minister Mariano Rajoy, with opposition parties demanding he appear before Parliament to explain how a former governing party treasurer amassed (EURO)22 million ($29 million) in a Swiss bank account.

It is the latest in a line of alleged corruption scandals to rock the recession-hit country. Although no arrests have been made or charges filed, the scandal is hitting Rajoy, who is demanding great sacrifices of Spaniards as the country battles to emerge from recession with 25 percent unemployment.

The governing Popular Party's absolute majority allowed it to vote down a proposal by the Socialist opposition party and other groups for Rajoy to make a special appearance to discuss the case. But it was agreed that Rajoy should answer queries on the issue in Parliament's weekly questioning session Jan. 30.

In the year since taking office, his government has ushered in major labor market and financial reforms, as well as cutting pension increases and civil servant wages and raising taxes. The attempt to convince European Union authorities and investors it is serious about reducing its swollen deficit and won't need a bailout has caused widespread pain among the public.

"It's very difficult to sell austerity when there is suspicion you are being robbed," said Jose Antonio Olmeda, Political Science professor at Spain's Open University. "It's a blow to his political management and weakens his authority, but he is obliged to do what Europe wants him to do."

Opinion polls show Spaniards have little faith in their political parties while some 300 politicians are reported to be implicated in corruption cases across the country.

"The political situation is terrible," said courier Jose Manuel Hoyos, 49. "Cases are coming out every day. Meanwhile, we pay for the party with tax hikes and cutbacks."

Rajoy's Popular Party has been equally shaken by widespread newspaper reports that the same former party treasurer, Luis Barcenas, also allegedly distributed under-the-table bonuses to party leaders in payments from construction firms.

Spain's economic crisis stems greatly from the collapse of its once booming real estate sector in 2008.

The Popular Party has denied all wrongdoing and promised Monday it will commission an external audit of its finances to fend off the corruption allegations. Spokeswoman Maria Delores de Cospedal said an internal investigation would be conducted and that anyone found to have received inappropriate payments would be expelled from the party.

The Barcenas case follows other scandals involving bankers, politicians, town councilors and even the royal family.

Chief among them has been the perceived mismanagement of one of the country's top financial entities, Bankia by former Popular Party minister and ex IMF chief Rodrigo Rato. Bankia last February reported (EURO)309 million in profits for 2011 but three months later changed that to (EURO)3 billion in losses.

It has since been nationalized and been given a bailout of (EURO)18 billion.

The royal family, meanwhile, has been busy battling to limit the damage caused by the naming of the king's son-in-law as a suspect in a case in which he and his partner allegedly funneled about (EURO)5 million in public money their nonprofit foundation received for conferences between 2004 and 2006 to other companies they controlled.